Indian officials have been left red-faced after an alleged terrorist, who they
accused Pakistan of harbouring, was discovered living just outside Mumbai
with his mother.

Wazhul Kamar Khan is suspected of carrying out the bombing of a train in Mumbai in 2006 in which 11 people were killed and more than 80 were seriously injured.

After the discovery and killing of Osama Bin Laden in Abbottabad earlier this month, Indian officials released a list of 50 other “most-wanted terrorists” which they said were also hiding in Pakistan.

Mr Khan was listed at number 41, along with Ilyas Kashmiri, a senior al Qaeda leader, Dawood Ibrahim, a gangster wanted for the 1993 Mumbai bombings, and Hafiz Saeed and Zaki ur Rehman Lakhvi, the founders of the Lashkar e Taiba terrorist group believed to have been behind the 2008 Mumbai terror attacks.

Five names on the list, which was formally handed to the Pakistani government, even belong to officers currently serving in the Pakistani army.

However, Mr Khan, a 44-year-old businessman who runs an embroidery workshop, was found to be openly living at his mother’s house in Thane, Mumbai, with his wife and children and with the full knowledge of the local police.

Opposition leaders said the gaffe was a “monumental lapse” and that the Indian Home office had “risen to the optimum level of incompetence”.

Sushma Swaraj, the leader of the opposition in the Indian parliament, said: “The Home minister has embarrassed the country... It is an unpardonable mistake.”

Mr Khan told the Press Trust of India: “I have been here in Thane for years how come they included my name? I am innocent in all the cases. I had no role to play in the Mulund or any other blasts. I was falsely implicated, I have been regularly attending court proceedings and I am sure that I will prove my innocence in court.” He had been arrested last year and released on bail.

B Raman, a strategic analyst and former Indian intelligence official said the government had been guilty of gross negligence and that other countries, not least Pakistan, will be wary of any of its documents relating to terrorism.

“It’s gross incompetence but there’s nothing *mala fide* in it. Pakistan will go to town to maximize the embarrassment and other governments will be worried that our documentation might not be correct. The Indian government’s credibility has been damaged,” he said.

GK Pillai, the Indian Home secretary, said the police were not to blame and that an inquiry is underway.